1. Field of the Invention
The present invention relates to detecting fraud in financial transactions.
2. Description of the Related Technology
Fraud detection systems detect fraud in financial transactions. For example, a payment card transaction fraud detection system may be configured to analyze transaction data to identify transactions that are fraudulent.
Existing payment card fraud detection systems may use transaction data in addition to data related to the transacting entities to identify fraud. Such systems may operate in either batch (processing transactions as a group of files at periodic times during the day) or real time mode (processing transactions one at a time, as they enter the system). However, the fraud detection capabilities of existing systems have not kept pace with either the types of payment card fraudulent activity that have evolved or increasing processing and storage capabilities of computing systems.
Financial transactions and payment card transaction data may refer to transactions, authorization of transactions, external data and other activities such as non-monetary transactions, payments, postings or a voice response unit (VRU) events. Moreover, payment card transaction data may include data derived from transactions using a physical payment card, e.g., with a magnetic stripe, and electronic transactions in which payment card data is used without the payment card being physically read or presented. Financial transactions can include credit or debit based transactions associated with, for example, a point of sale (POS) terminal or an automated teller machine (ATM). These transactions are often aggregated into databases from which an analysis can be performed for fraud.
However, existing fraud detection systems have failed to keep pace with the dynamic nature of financial transactions and payment card fraud. Moreover, such systems have failed to take advantage of the increased capabilities of computer systems. Thus, a need exists for improved systems and methods of detecting payment card fraud.